The Supreme Court on Tuesday clarified that Section 143A of the Negotiable Instruments (NI) Act shall not have a retrospective effect.

Section 143A of the NI Act states the court can order interim compensation to the complainant during the pendency of the case.

This section was inserted after the amendment to the NI Act in 2018. It was, however, provisioned that the compensation amount shall not exceed 20% of the amount of the cheque. The order passed by the Supreme Court means that the provision of Section 143A shall only be applicable in the cases filed after 2018 amendment of the NI Act.

The order was pronounced by the apex court division bench comprising Justice Uday Umesh Lalit and Justice Vineet Saran in the case of G.J. Raja vs Tejraj Surana. Raja, had challenged the Madras high court order which had directed him to pay interim compensation in a cheque bounce case.

In December 2018, a fast track court-II, metropolitan magistrate, Egmore, Chennai had passed an order directing Raja to pay 20% of the cheque amount as an interim compensation as per the provisions of the Section 143A of the Amended NI Act. On the appeal filed in Madras High Court, the court upheld the retrospective order, but reduced the interim compensation amount from 20% to 15% of the cheque amount.

Close